I also wanted to add something, because some of you may hear about this in the news. So in the next few days, Federal Reserve Chairman Ben Bernanke has to set a course between market mayhem and the "Greenspan put."
The Greenspan put is the idea that, in times of crisis, the Fed will step in to bail out financial-market participants with lower interest rates, as it did in response to the Russian debt crisis in 1998, when Alan Greenspan was at its helm. The term was coined in early 2000 by Credit Suisse trader Steve Kim, then a derivatives analyst at Merrill Lynch, and popularized by Pimco economist and fund manager Paul McCulley. A put option insures investors against losses. Both men felt that the belief the Fed would similarly insure investors against losses whenever markets got rocky encouraged risky investment behavior.
With markets again in turmoil, there's been a cry from some Wall Streeters and corporate head honchos lately for the Fed to lower short-term interest rates to settle frayed nerves.
Just an FYI http://forums.babypips.com/images/smilies/smile.gif
The Greenspan put is the idea that, in times of crisis, the Fed will step in to bail out financial-market participants with lower interest rates, as it did in response to the Russian debt crisis in 1998, when Alan Greenspan was at its helm. The term was coined in early 2000 by Credit Suisse trader Steve Kim, then a derivatives analyst at Merrill Lynch, and popularized by Pimco economist and fund manager Paul McCulley. A put option insures investors against losses. Both men felt that the belief the Fed would similarly insure investors against losses whenever markets got rocky encouraged risky investment behavior.
With markets again in turmoil, there's been a cry from some Wall Streeters and corporate head honchos lately for the Fed to lower short-term interest rates to settle frayed nerves.
Just an FYI http://forums.babypips.com/images/smilies/smile.gif
